PLAYGROUND AND HOSPITAL FURNITURE

Transcription

1 Feasibility Quick Scan PLAYGROUND AND HOSPITAL FURNITURE SINGLE SPARK Your business-in-a-box! HOW TO USE ABOUT THE BUSINESS INPUT FEASIBILITY MARKET FEASIBILITY FINANCIAL FEASIBILITY SUMMARY ACTION PLAN

2 HOW TO USE this feasibility scan This feasibility scan will guide you in investigating the potential of starting up a Playground and hospital furniture factory in your country. It is based on the input of experienced entrepreneurs and successful businesses in this sector. After filling in this scan you will have an indication of what input you need to start this business, who your potential customers and competitors are, and whether or when you can be profitable. ABOUT THE BUSINESS First you get an introduction to CCC and what is required to run a successful Playground and hospital furniture factory. This will help you get a better understanding of the type of company you may start up. INPUT FEASIBILITY This module describes which machines, materials, expertise and housing you need to start your business. You fill in the check boxes in this module to mark the items you can or can t obtain in your own country. This will help you identify which input forms a bottleneck, and whether you have to import or replace certain materials/machinery. MARKET FEASIBILITY This module supports you in identifying your competitors and potential customers for the product you will be selling. It contains tables to help you structure your market research. This will give you better understanding of the market: you will know your competitors and understand the needs of your customers. FINANCIAL FEASIBILITY The module should give you an idea if starting up a Playground and hospital furniture factory in your area is financially viable. The financial feasibility module guides you to estimate your break-even point and helps you to create a simple profit and loss statement. To use this module, you have to open the excel file which came with this document SUMMARY In the summary you can fill in the conclusions of this feasibility scan: what are the key strengths, weaknesses, opportunities and threats you and your business will be facing? ACTION PLAN The action plan contains all steps needed to start up your Playground and hospital furniture factory. 2

3 ABOUT THE BUSINESS PLAYGROUND AND HOSPITAL FURNITURE IDEA With this business concept you will manufacture playground equipment and simple hospital furniture. The main raw materials you will use to make your products are steel pipes and tubes. You need a workshop with bending, welding and cutting equipment. The business concept is based on a successfull company in Malawi, who makes similiar products. Your main customers could be NGOs in the early child hood-, health- and education-sector, hotels, hospitals and schools Purchase materials Manufacture the products based instruction manuals and videos Conduct strict quality checks Deliver and install the products to your customers PRODUCTION PROCESS There are two key issues regarding PLAYGROUND AND HOSPITAL FURNITURE: KEY ISSUES 1. Customers who buy playground equipment and hospital furniture demand quality products. They want safe playground equipment and long lasting hospital furniture. So quality is key; from procurement to production to sales. 2. You must have reliable suppliers for your materials. For hospital furniture stainless steel, strong caster wheels and long lasting two component paint are essential. 3

4 ABOUT THE BUSINESS PLAYGROUND AND HOSPITAL FURNITURE INPUT SWOT EQUIPMENT Bending machine Welding machine Sawing machine Drilling machine Compressor Small electric tools Small hand tools STRENGTH Based on a successful company High quality products Wide range of potential customers WEAKNESS Some materials are hard to get OPPORTUNITIES THREATS RAW MATERIALS STAFF Steel round tubes Steel galvanized and stainless steel sheet Quality two component paint Caster wheels Bearing and chains 1 manager/salesman/ procurement officer Administrative person for accounts and stock keeping Technical staff like;welders, general fitters and painters Same type of products made from Other workshops can copy your steel tubes and sheets like bicycle products carts. YOUR COMPETENCES LOW HIGH TECHNICAL KNOW-HOW YOU NEED TO BE INNOVATIVE YOU LIKE TO SELL PRODUCTS LAND/ BUILDING/ Workshop: +/- 175 m2 Warehouse: +/- 75m2 Office: +/- 20m2 HANDY SOCIAL SKILLS $ INVESTMENT $ USD BACKGROUND INFO See and other videos and: documentation see USB-stick. 4

5 IMAGES PLAYGROUND AND HOSPITAL FURNITURE 5

6 IMAGES PLAYGROUND AND HOSPITAL FURNITURE 6

7 DEFINE YOUR BUSINESS IDEA PLAYGROUND AND HOSPITAL FURNITURE Now that you know more about what it takes to run a successful Playground and hospital furniture factory it is time to define your own business idea. What will the name of your business be? What product or service will you exactly be selling to your customers? Who are your customers? Will you be selling to slaughterhouses, local markets, or perhaps even end-consumers? Where will your business be located? There are important decisions to make before you continue investigating and working out your ideas in more detail. Fill out this information in the section below. Name of business: Why do you think your business will be a success: What customers will be targeted: Where will the business be located: What is the biggest challenge for this business? 7

8 INPUT FEASIBILITY PLAYGROUND AND HOSPITAL FURNITURE This chapter shows you all crucial items you need to start up the business and to keep it running successfully. You should do a market research to investigate whether the items are available in your area, for what price and with what quality. You can write down all the information you will collect on the following pages. 1 EQUIPMENT Crucial machines you need to start up your business. 2 RAW MATERIALS Crucial materials you need to start up your business. 3 OVERHEAD Staff/ Land/ Building/ Electricity 8

9 1 EQUIPMENT Below you can find a list of all the essential equipment that is required to start up your Playground and hospital furniture factory. For each item you should indicate where you can source it from, and what the cost of the item is at that source. If there are multiple sources please include those that are most conveniently located and/or sell the item at the lowest price. If you don t need an item then please score it out, and provide a short explanation why you do not need it. If you think you will need additional items that are not included in the list then please add them on the empty lines on the next page. WHAT COST WHERE Bending machine (JD Pipebender model 32, price; 1500 USD excl. shippig cost) Weldig machine Sawing machine Drilling machine Compressor Small electric tools Small hand tools TIP: Probably you have to import the bending machine from Europe. The compressor you need to spray paint, it is also an option to paint by hand, but the quality will look less professional. 9

10 1 EQUIPMENT WHAT COST WHERE 2 Computers with MS Office Printer Office furniture for minimum of 2 persons Buy or rent a pickup for procurement and sales 10

11 2 RAW MATERIALS Having thought about the equipment you will need, the next step is to define the raw materials you will need to keep your business running smoothly. These are materials you will need to purchase regularly. As such, these raw materials should not only be available locally and at a good price, but the supply should also be reliable. Not being able to purchase any of these materials regularly will seriously threaten your business. In the list below the raw materials which make up about 80% of the material cost price are mentioned. The other materials you can find in the excel sheet. WHAT COST/ UNIT WHERE Caster wheels, 10cm (pcs) Chain, 8mm, (mtr) Matras hospital bed Paint, 2K, blue, (ltr) Paint, Polyurethane white (ltr) Round tube, 20x2.0mm, galvanized (pcs) Roundtube, 76x1.6mm, (pcs) TIP: For the hospital equipment strong caster wheel, stainless steel sheet and strong paint are essential. For the playground equipment the sizes and quality are also important, but less then for the hospital furniture 11

12 2 RAW MATERIALS WHAT COST/UNIT WHERE Round tube, 25x2.0mm, (pcs) Round tube, 25x2.0mm, galvanized (pcs) Spring, car, (pcs) Square tube, 16x16mm, (pcs) Sheet steel, galvanized, 1.5x1224x2448, (pcs) Sheet steel, mild, 0.6x1224x2448, (pcs) Steel sheet stainless steeel 1.6mmx1224x2448, (pcs) Thinners (ltr) 12

13 3 OVERHEAD A large part of your costs can be overhead: costs that cannot be directly related to making playground and hospital furniture. Your overhead costs will be made up of the expenses you make for staff, costs related to the location of your Playground and hospital furniture factory, and the costs for marketing. In this sheet you should try to fill in as much information as possible to make your financials as accurate as possible. STAFF COST/ YEAR 1 manager/salesman/ procurement officer (calculate allowance for yourself or salary for a staff member) 1 administrative person for accounts and stock keeping 1-5 Technical staff like;welders, general fitters and painters LAND/ BUILDING/ ELECTRICITY COST/ YEAR RENT FOR BUILDING: Workshop: +/- 175 m2, Warehouse: +/- 75m2, Office: +/- 20m2 ELECTRICITY: about a few percent of the cost price of the production TIP: - As a business owner you are not really a staff member, so you don t calculate a salary for yourself. Because the profit of the business is your income. But probably you will not make directly a profit in the first year. So how to survive? Calculate a reasonable allowance for yourself (and your family). 13

14 3 OVERHEAD MARKETING COST/ YEAR 500 x Printing cost brochures and business cards (design supplied in starter kit) 20 small advertisement newspaper Traveling cost sales officer OTHERS COST/ YEAR TIP: 14

15 MARKET FEASIBILITY This module helps you to gain a deeper understanding of the market you will be conducting business in. Simply put, the market consists of your competitors on the one hand, and the potential customers for your products on the other. It is wise to visit several potential competitors and customers, as it will help you better understand the market. The better you know who your competitors are and how they run their business, the better you will be able to differentiate your business from theirs, giving you a competitive advantage over them. The same goes for your customers: knowing them and what they want will allow you to better address their needs, and as such to make your products and/or services more attractive to them. 1 COMPETITORS Identifying your competitors 2 3 POTENTIAL CUSTOMERS Understanding your customer need SALES ESTIMATION Estimate per product the quantity and the price your customers are willing to pay 15

16 1 COMPETITORS Visit your competitors and try to find out as much as possible about how they run their business. For example, what is your competitor exactly selling? What is the quality? At which price is he selling his products? Are there any USP s (unique selling points: factors positively differentiating the competitors products from other competitors) he has over other competitors, and to what extent does it contribute to the success of the business? Write down all relevant information in the tables below. PRODUCT: Playground equipment Competitor Prices USP Quality Remarks Peters story: Playground equipment was only made on small scale in Malawi. The quality was low, while the bigger customers like hotels and NGOs wanted high quality playground equipment. They don t want children to injure themselves by sharp edges or low quality equipment. Most of the customers imported the play ground equipment from South Africa, but this was very expensive. 16

17 1 COMPETITORS PRODUCT: Hospital furniture Competitor Prices USP Quality Remarks In Malawi there were no local producers of hospital furniture, everything was imported. 17

18 2 POTENTIAL CUSTOMERS Visit your potential customers and try to find out as much as possible about them and their needs. What type of customer is it? Is it a NGO, a government, a business or an end consumer? Is the customer already buying the product? If so, what quantities does he need? And what price is he paying, for what quality? What are the USP s of the products he is currently buying? Does he have any other needs that you could tailor to? The better you understand your customers needs the better you will be able to serve them. PRODUCT: Playground equipment Customer name Segment (NGO, Government, Business, Consumer) Does potential customer already buy this product? If yes; Price, quality, USP Customer needs Peters story: Playground equipment is very popular in Malawi. We sell about 80% to NGOs who have child protection/education/pre school programs. Furthermore we sell them to private schools, hotels and other public places. Our breakthrough was a beautiful playground at a popular children hospital, people appreciated the quality of the equipment. 18

19 2 POTENTIAL CUSTOMERS PRODUCT: Hospital furniture Customer name Segment (NGO, Government, Business, Consumer) Does potential customer already buy this product? If yes; Price, quality, USP Customer needs Peters story: Playground equipment is very popular in Malawi. We sell about 80% to NGOs who have child protection/education/pre school programs. Furthermore we sell them to private schools, hotels and other public places. Our breakthrough was a beautiful playground at a popular children hospital, people appreciated the quality of the equipment. 19

20 3 SALES ESTIMATION Now you have an idea about the demand of your customers and the price of your competitors, you need to make an estimation of the sales of your product/ service. Estimating tour sales is not easy, but it s important to predict if your business will be feasible. Try to fill in realistic numbers for the first three years. YEAR 1 YEAR 2 YEAR 3 Product/ Service Sales price/ unit Number of units/ year Total Sales price/ unit Number of units/ year Total Sales price/ unit Number of units/ year Total Total year 1: Total year 2: Total year 3: TIP: We advise you to discuss the sales numbers and prices with friends an or experts. Also check if the capacity of your staff/ equipment is sufficient for the sales numbers you predict. 20

21 FINANCIAL FEASIBILITY The financial feasibility module guides you to estimate your break-even point and helps you create a simple profit and loss statement. In the attached Excel document you can fill in all the information you gathered with your market research. The module should give you an indication if the startup of a Playground and hospital furniture factory in your area is financially viable. Screenshot of the financial feasibility scan. Open the Excel file and fill in the Financial feasibility scan. 21

22 SUMMARY PLAYGROUND AND HOSPITAL FURNITURE Below you can see a so-called SWOT diagram. Using the knowledge you gained from the previous sheets, in this diagram you will fill in the most important strengths and weaknesses of you and your Playground and hospital furniture factory, as well as the main opportunities and threats your Playground and hospital furniture factory faces in its environment. This will enable you to go to the next step: creating an action plan. There you can match strengths with opportunities to find a competitive advantage for example. Or you can define actions to convert the weaknesses and threats into opportunities or strengths. SWOT STRENGTHS WEAKNESSES CUSTOMER NEED Describe your customers, and explain why will they buy your product? OPPORTUNITIES THREATS 22

23 ACTION PLAN PLAYGROUND AND HOSPITAL FURNITURE Steps to start your business Completed Yes / No Details Next steps Define your business idea Decide on your product characteristics (color, size, quality) Select a location Availability and pricing equipment Availability and pricing of raw materials Know your competitors Know your customer needs Know the price your potential Customers currently pay Know what your potential customers are willing to pay Estimate your sales price 23

24 Steps to start your business Completed Yes / No Details Next steps Estimate your costs Estimate your break-even point Do you have an idea about a successful marketing Do you have an idea about when you want to start your business Do a reality check with friends/ experts to discuss the feasibility of your business idea. 24

25 NOTES PLAYGROUND AND HOSPITAL FURNITURE 25

26 2015 by Single Spark. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of Single Spark. Single Spark The Netherlands +31(0)